5-year fixes 10x more popular than variable rates for remortgage
5-year fixes 10x more popular than variable rates for remortgage : For remortgage 5-year fixed rate transactions exceeded variable rate business by 10 times in October, LMS research indicates.
The popularity of variable rate remortgages has fallen significantly in one year – with borrowers overwhelmingly opting for a fixed rate product instead.
The number of variable rate remortgage transactions fell by 75% from October 2016 to October 2017. Nick Chadbourne, chief executive of LMS, said: “There will be interesting times ahead as the Bank of England hint at a long stretch of rises, I suspect many more consumers will opt to fix deals while rates are rock bottom and the market will continue to flourish for the foreseeable future.
“Lenders are tweaking their product portfolios to respond to changing consumer demand and remain competitive. With variable products unable to deliver the security consumers are seeking, this means fixed-rate products are set to stay at the top of the leader board for the foreseeable future. Eight in 10 (78%) remortgagors did so because they correctly predicted an imminent Bank of England base rate rise – which happened in November.